The agreement was reached after Haas trusts in Philadelphia and hedge-fund operator John Paulson, the two largest shareholders in Rohm & Haas, put up $3 billion to help close the deal, the story stated.

The settlement says the merger must close April 1, and also settles the lawsuit Rohm & Haas filed in Delaware''s Court of Chancery in late January seeking to force Dow Chemical to honor its July merger agreement, the story noted.

Dow chief executive Andrew Liveris said: "The next three weeks will have to drive how we put this together. [We are] relooking at how we put this model together because of the new reality [of a bad economy]."

Dow announced that it would cut an additional 3,500 jobs from the combined corporate entity and close research labs and plants, the story added.